So What's It Worth?
Posted On: 2007-05-17
You don't have to be in this industry long before you begin to wonder if that really catchy attention grabbing domain name that you bought is actually worth something. Many of us even buy domain names just on the off-chance that they may become worth something more than the initial registration fee that we paid for them.
Others don't even think of their domain names as being worth anything ... until someone makes them an offer. When that happens they have no idea what might be a reasonable price to ask for the domain in question.
That's something that we've been dealing with this week and I've already mentioned it here a couple of days ago when I asked 'How Long is a Piece of String'. Basically the story is that a client of ours wants to procure a domain name from a third party. The third party has owned for some time but done absolutely nothing with it. There's no traffic, no Google juice, nothing but the domain name.
So both the client and the third party have asked us what it might be worth and we're only slightly less clueless than they are. In the past when we've sold domain names there has been a considerable amount of traffic and a considerable amount of Google juice and so assessing their worth has been relatively easy.
But this time what do you go on? The domain has no commercial value except to our client; it's not a word or phrase that people would type into the address bar yet and it may never become much of a type in so what's it worth?
We took the easy way out, we gave our client a ballpark figure and left him to negotiate with the third party and I expect that we won't see a sale any time soon. We think our client is probably putting a reasonably realistic figure on the domain name's value while the third party may expect a whole lot more.
But how would you put a value on a domain name of that you might own?
Oddly enough that's a question we saw someone else ask on an adult webmaster board today and the answers were enlightening. Someone passed on the URL for an automated domain name appraisal site. Leapfish.com gives you the chance to enter your domain name and they will then put a dollar value on the name after they have assessed it against a set of standards.
Some of the things Leapfish looks for include something they call ‘unwanted characters', length, Google search results, Yahoo search results, MSN search results and archive.com score. After running a couple of our domains through Leapfish I'm left wondering just how accurate it really is. All of the domains that I tested have plenty of links in Google but Leapfish never found one of them and of course, with no links in Google, the site isn't going to be worth very much.
So if you're interested in finding out the value of a domain name I wouldn't be rushing off to try it in Leapfish. I doubt that it's even going to give you a reasonable ballpark figure in most instances.
Ok, if an automated assessment tool isn't going to be of much use to you then what is? Well the post another person in that thread might be a lot more help to you. This person suggested that:
'... it really is relative to the market but in the end it's about what the buyer wants to pay, how strong he keyword is, targeted demographic, memorable, marketable, easily typed. Real English language terms or short phrases, and a bunch of other shit.'
And I think that pretty much what you should be looking for and it goes back to something that I once talked about in another place. If at all possible you really do need to have a domain name that is memorable; will a person who sees that domain name on the back of a bus remember it long enough to type it into a browser the next time they're in front of a computer?
If the answer is yes then there is a lot of value right there ... and it becomes even more valuable if there is a buyer in the market for a term like that. The buyer may not even want to use the domain name for anything other than a 301 redirect to his established domain but it's still going to have a lot of value.
Now whether or not the domain name you own and want to sell fits into that category is something that's quite variable. If the conditions are right it might even be worth more than a more forgettable domain name that has a lot of traffic and a lot of Google juice On the other hand, if the conditions are all wrong, it may be worth absolutely nothing.
I hope you weren't expecting a definitive answer here because, as you can see, there just isn't one. Your domain name might be worth a heap of money ... but then again it might be worth very little.